This post kicks off our new series on Online Stock Broker Reviews. Over the next few weeks we will be breaking down some of the most popular online brokers to help you find the best place to invest your money.
Scottrade is one of the more popular online investment brokerages going right now. More than likely you have seen their commercials with their CEO flying around in a helicopter telling people about how good Scottrade is. Well that’s a commercial, is Scottrade as good as it’s cracked up to be?
Of course Scottrade offers stock trades, but they also offer no-fee IRA’s, mutual funds, ETFs and ESAs, as well as options. Many of these are more advanced and may or may not be a fit for your investing needs but it’s nice to know they are available should you be interested down the line. For the rest of this Scottrade review however I will focus on stock market trades.
One of the first things that caught my eye on the Scottrade website was the low amount of money needed to open an account at just $500 (with $2,000 needed to open a margin account) so young investors and first time investors may have particular interest in this. Scottrade also advertised no hidden fees at the time of this writing which is helpful if true.
Their commissions are competitive with other online brokerages at just $7 for online trades, and they offer touchtone (IVR) phone system trades for $17 and broker assisted trades for $27 for those who aren’t comfortable buying stocks online. There is also fine print that will add 1/2% of the principal value for stocks priced below $1. Generally I would recommend against buying penny stocks
Those of you who are new to online investing and are concerned with making a mistake or having your computer mess up your trade would be interested to know that Scottrade was awarded the JD power and Associates award for customer satisfaction in 2008 so it would appear they have a good amount of customer satisfaction with their support. Scottrade is also a member of the Securities Investor Protection Corporation (SIPC) which protects up to $500,000 in customer securities.
Lastly, Scottrade offers a nice assortment of trading tools including streaming quotes (my favorite… I like to obsess over my stocks, a very bad habit by the way) and Scottrade Mobile which features the ability to make trades from your smartphone. There is also an option for Scottrade Elite but you must have a minimum account value of $25,000 so obviously this option is not for everyone.
All in all it appears that Scottrade has most of the standard online investing options that the typical investor needs. There are certainly other online brokerages that feature cheaper commissions but options like the low minimum balance needed to open an account make Scottrade an interesting online investment option.